China’s leaders deeply believe in digital solutions to meet the country’s challenges – and they don’t leave their development up to the private sector. In part 4 of our series on the 13th five-year plan, Mirjam Meissner describes their highly innovative plans to spur new economic growth – and to strengthen social Control.

Governments all over the world try to adapt to the changing technical environment created by the internet, IT-systems, and data analysis. Political decisions often lag behind state-of-the-art information technologies or even ignore their potential. China’s leaders, a group of 60-plus aged male engineers, could not be further removed from being digital natives. It seems hard to believe that they would effectively employ digital solutions in China’s development strategy. But China’s 13th five-year plan shows that they do just that, and that they do it in a very smart way. The recently released planning document displays a remarkably innovative approach to the use of information technologies.

Almost every single chapter of the document refers to the utilisation of IT, the internet or Big Data. It contains highly innovative concepts. Some of them would appear scary to Western observers, especially when it comes to social monitoring and control. So, let’s dig deeper to get an impression on the concepts on digitisation in the Five-Year Plan.

  1. Fostering innovation with the help of online platforms

China’s planners are obsessed with the internet as a tool for economic innovation. A national “innovation internet” (创新网络, sometimes also referred to as 创新网络平台) is to create a better basis for the exchange of ideas between industry, universities, research institutes, the government and different regions. The Chinese public will be encouraged to participate in innovation (大众创业万众创新) via crowd sourcing and online-lending platforms. The majority of the areas in which China wants to become more innovative focus on digital technologies: seven out of fifteen core projects aim at cutting-edge information technology, among them quantum computing, national cyber-security and Big Data.

  1. Digitisation of industries and the rural economy

As economic growth slows down, China urgently needs new growth engines. The Chinese government will continue to push the modernisation of industrial production with the help of automation and smart manufacturing as part of its “Made in China 2025” strategy. But the concepts for the digitisation of the economy in the FYP lead one step further. China’s leaders want to expand online financing tools from urban areas to rural markets, enabling farmers and small businesses in the countryside to purchase modern trucks or bigger barns. Simultaneously, the plan promises farmers help with increasing their sales networks. It encourages internet companies to build rural e-commerce platforms and express-logistics for remote areas. If implemented successfully, this will create new sources for growth and help the Chinese economy to remain stable.

  1. Big Data as a strategic resource – for the government

China’s approach to Big Data is likely to become the most controversial part of its digitisation strategy: The use of Big Data can help unlock new sources for economic growth. Yet at the same time, it is viewed as a tool to increase social monitoring and control.

China’s leaders view the government as the owner of the resource “data”, and they see the government in a leading role to build up a “National Big Data Platform” and other related infrastructure. The aim is to centralise data and position the government as a gatekeeper.

This model has many positive implications for China’s economic development: Government data collection will be quite comprehensive and will (partially) be made available to companies to create new business models. In return, private companies will help make the government’s platform more comprehensive by sharing their own data.

The list of digital concepts put forward in the 13th five-year plan could be continued - from the use of internet data, cloud computing and Big Data technologies to enhance the accuracy of official statistics to the development of an internet of vehicles and real-time monitoring of industrial emissions. The plan also calls to speed up the development of a Social Credit System, which is highly controversial among civil rights and privacy advocates in the West. It is an IT-based rating system for collecting data about the online and offline behaviour of companies and individuals, which goes far beyond traditional credit rating instruments.

Not all of these digital concepts are totally new, and the next five years will test the leadership’s ability to implement them. What the plan does show today is the mindset of China’s current leaders, who, despite their age and socialisation, display a remarkable openness to put cutting-edge IT solutions at the heart of their political strategy.